Trading involves the buying and selling of financial instruments like stocks, bonds, commodities, currencies, and derivatives with the intention of making a profit. It can occur on various time frames, from seconds (day trading) to weeks or months (swing trading). Traders often rely on market analysis and strategies to decide when to enter and exit positions.
Trading involves the buying and selling of financial instruments like stocks, bonds, commodities, currencies, and derivatives with the intention of making a profit. It can occur on various time frames, from seconds (day trading) to weeks or months (swing trading). Traders often rely on market analysis and strategies to decide when to enter and exit positions.
Trading is nothing but buying the right share, at the right time, at the right price. First it involves the analysis of the market. Then we need to check how the market conditions are working. After this we have to check how the specific industry is working on which we are focusing. All these factors about the market, industry on which we are focusing & the particular category of the share which we are looking at has to be supported with data. Market data is the only pointer which will be helping us to analyse about a particular share. Data can be quantitative or qualitative. For example, if we are looking at Fast Moving Consumer Goods(FMCG) as an industry to do the market analysis, then quantitative data has to be considered because there are too many players, followed by lot of products, and within these products, there are different product segments, different market segments and based on this the market/segment analysis will vary.
Once we are through with the industry analysis, then comes the corporate analysis. Again, let us take the example of FMCG market. In an FMCG market, there are so many players. The creamy layer involves Multi National Companies(MNCs), followed by Large Indian Corporate Conglomerates, Listed Limited Companies, Closely Held Companies, MSME’s, Private Limited Companies, Partnerships & Sole Proprietor Companies. We need to consider the volume of business done by all these operators to come to a conclusion. Then comes the question of freezing on couple of listed companies on whom we can bet. Subsequently, we do an analysis to finalize the best company out of the shortlisted companies.This is a top down approach, in which we start right from the industry, then we come to the size of the market, followed by the best organization in that particular market. This is a proven method for both trading & investing. When we trade, we just enter the share at the right price & exit when the target price is reached. This target price is decided based on many technical parameters like demand, supply, price action & indicators. Sometimes, especially when these novice traders come to the share market & start trading, market dynamics become different & the trade can go against them. When they do a top down analysis like this, even when the market goes against their calculations, they can hold on to these shares for a while & them exit when the appropriate price is reached. Even if they hold on to these companies for a while, nothing happens to the trader who has become an investor, as they can afford to hold on to these shares due to their strong fundamentals.
Apart from this, technical analysis is also required as described, with proper evaluation of the demand of the share based on the number of shares people who want to buy, scope for supply of the share in this market due to related factors like number of sellers etc, on what basis the price action is happening in the market for this particular share and the related indicators which are affecting this particular share.
Regarding technical analysis, we have a specific, focused way of doing it. We have a unique, innovative, protected & patented trading system which is not available in the public domain. Based on your commitment to learn trading, this trading system can be showcased to you in a webinar. In the webinar, we will give you a glimpse of this trading system.After this you will have total clarity on how to go about trading with this powerful system.Want to know more?